Wall Street's Monday Lunch Options

A healed Greek Achilles, well kinda sorta and along with one tasty green apple, help bulls retract Friday’s fearful losses. As of 11:15 ET the SP-500 (NYSEArca:SPY - News) is up 0.55% and in good position to “fly” higher if Leonardo Pisano Bigollo has a technical say in those matters.

A fearful weekly doji in the SP-500 etched out Friday has been placated with an upside resolution in Monday’s session. In the spotlight, Greek policymakers finally agreed to a demanding austerity plan over the weekend which will allow the debt riddled country to avoid imminent default and obtain a second round of bailout funds from the EU and IMF.  

Some trader concern of Greece successfully implementing the agreed upon austerity measures has kept a lid on bulls swapping default risk and national bankruptcy for clarity in principle, but whose execution will likely prove a difficult road.

In those intertwined markets of notice, the EUR/USD is displaying a bit of hesitancy on the part of bulls. The currency pair is up from Friday’s close but trading off 0.25% after tacking on 0.43% in Sunday’s session in a market which only sleeps on Saturday’s.

Technically in the EUR/USD, bulls are holding onto 10SMA support near 1.32 and which appears critical to their case without jeopardizing a move down to a test of 1.30 comprised of the February lows and 50SMA.

The VIX (.VIX) is off 6.0% at 19.50%. The sentiment gauge is showing tempered signs of relief from investors on the heels of Friday’s fearful spike to 22% resulting in a test of 50SMA resistance and short-term panic differential of 17% relative to its 10SMA.

And for a third straight session, an insatiable appetite for a very green technical Apple (NasdaqGS:AAPL - News) is helping support the broader indices. Shares of AAPL are up 1.35% and testing the $500 numerical benchmark while striking fresh all-time-highs.

Also in the pilot’s seat on the Naz’ 100, shares of Priceline (:PCLN) are up nearly 20 points and atop the Percent Leaders board with its gainer of 3.55% on technical driven buying. Shares of the online travel giant have broken out to marginal all-time-highs this morning from a complex 10-month long inverse H & S pattern with no company-specific drivers in the mix and earnings still a couple weeks out on February 27.

On the corporate confessional side of the market, shares of cash dispensary and security systems outfit Diebold (NYSE:DBD - News) are up 8.80%. The bullish response follows some extra coin to the tune of $0.56 left in the hands of investors expecting to receive $0.84 but walking away with $1.40 per share for the fourth quarter. Looking forward, the company issued above views sales forecast of 3% - 6% growth on revenues of $2.92B - $3.01B compared to estimates of $2.89B.

Looking ahead on the earnings front, investors will see another wave of reports this week beginning after the market close. Announcements will be largely relegated to second-tier status and in general; should prove of even less influence on the broader market given where we are in the long-in-the-tooth reporting season. A couple exceptions to the general rule are Wednesday’s release from Deere (NYSE:DE - News) and General Motors (NYSE:GM - News) on Thursday.

Finally and in those sometimes accurate heat-seeking option markets, along with stock traders biting into the $500 level in Apple (NasdaqGS:AAPL - News) this morning, option traders are quite busy with more than 350,000 contracts having changed hands already compared to an average day’s work of about 250,000. Calls are favored by a fairly run-of-the-mill 2-to-1 margin with the bulk of today’s action concentrated in the February and March near and out-of-the-money contracts. Hmm, I guess you could call that “concentrated apple juice” and premiums which might just prove a bit sugary for naked long bulls chomping down to hard on those long deltas.

 

Chris Tyler
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual. 

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Wall Street's Monday Lunch Options

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